House Republicans fighting Treasury Dept. effort to limit political activities of tax-exempt groups

June 19, 2013: A man holds up a placard during a Tea Party rally to "Audit the IRS" in front of the U.S. Capitol in Washington.
(Reuters)

Republican lawmakers are fighting back against what they call an effort by the Obama administration to silence the political speech of tax-exempt groups, including those originally targeted by the IRS.

A House panel passed a bill Tuesday that would delay regulations by the Treasury Department designed to limit the political activities of so-called social welfare groups.

Treasury officials claim the regulations would help clarify vague rules about which groups qualify for tax-exempt status, but congressional Republicans believe the regulations are an attempt to legalize the targeting of conservative groups.

“Make no mistake about it: the Obama administration is doing this as a blatant attempt to silence political speech,” Rep. Tom Price, R-Ga., said in a statement.

The proposed regulations came after IRS officials acknowledged last spring that agents had improperly targeted Tea Party and other conservative groups for extra scrutiny when they applied for tax-exempt status.

The Ways and Means Committee voted 23-13 to pass a bill that would block the regulations for a year. It was a straight party-line vote, with Republicans in favor and Democrats opposed. The full House is expected to take up the bill after the House returns from its Presidents' Day vacation.

Committee Chairman Dave Camp, R-Mich., said delaying the regulations would give Congress and the Justice Department time to finish their investigations.

"The notion that the administration would rush forward with rules intended to remove these groups from the public forum is simply unacceptable," Camp said. "I have long made clear that this committee will fight any and all efforts to restrict the rights of groups to organize, speak out and educate the public."

Senate Republicans have embraced the effort but the bill has little chance of becoming law because Democrats oppose it. Democrats said the bill is little more than an election-year ploy by Republicans to rally the party base. They note that final regulations probably wouldn't be issued for at least a year, anyway.

"Unfortunately, the proposed regulations are being used by Republicans in Congress to renew a tireless campaign to turn the issue into a scandal that would pay political dividends," said Rep. Sander Levin of Michigan, the top Democrat on the Ways and Means Committee.

The regulations would apply to social welfare groups applying for tax-exempt status under section 501(c) 4 of the tax code. Under current regulations, these groups can engage in politics, but their primary mission cannot be to influence the outcome of elections.

"It is about disclosure," said Rep. Bill Pascrell Jr., D-N.J., a senior member of the House Ways and Means Committee. "Nowhere in the Bill of Rights does it say you have the right to say anything you want — and also not pay any taxes."

The current regulations have led IRS agents to ask groups intrusive questions about the amount of time they spend on activities that are potentially political.

The proposed rules would limit certain "candidate-related political activity,” but leave open the question of how much the activity would be restricted.

Limited activities would include voter drives and voter registration efforts, as well as ads that "expressly advocate for a clearly identified political candidate or candidates of a political party." Also included would be ads that mention a politician or a political party within 60 days of a general election or 30 days before a primary.

Republicans have raised myriad concerns in recent weeks about the status of the IRS controversy. The Justice Department has received complaints over the slow pace of the investigation and the discontent grew louder after officials announced last month they aren’t expecting criminal charges will be filed in the case.